10 Lessons I’ve Learned as an Airbnb Host

This is Chapter 4 of The Airbnb Series — the juicy details of life as an Airbnb host. Before you read this, check out Chapters 1, 2 and 3 — or download the free guide, below, to get all four chapters in one convenient .pdf.
_________
Almost one year ago, I took the crazy leap into becoming an Airbnb and VRBO host.

Since then, I’ve earned $28,268.35. I’ve met some fascinating people from around this world. And yes, I had one police visit.

In this 4-part Airbnb Series, I’ve pulled back the curtain. I’m revealing the good, the bad and the ugly.

How lucrative is this … and how many years has it shaved off my life? 🙂 More importantly, what advice would I share with others who want to try this?

One Year as an Airbnb Host.

I’m now celebrating my one-year anniversary of the Airbnb Experiment. (YAY!) In the past 12 months, I’ve grossed $28,268.35, which averages to $2,355.70 per month. This is higher than my starting salary at my first job after college (after adjusting for inflation.) Wowza!

(*Note: I’m calling this the “Airbnb Experiment” for the sake of ease, although — as you can see — bookings also come from VRBO.com — Vacation Rental By Owner — associated with HomeAway.com and VacationRentPayment.com)

*Note: “Debits” refers to security deposits I’ve refunded. Airbnb holds security deposits on my behalf, so I don’t need to process it, while VRBO/Homeaway sends me the deposit, which I later refund.

Naysayers love uttering defeatist statements like, “In this economy, it’s impossible boost your income!” Guess what, naysayers: Here’s an example of one side gig that grosses more than my former salary, while occupying only a few hours per month. A little bit of hustle goes a long way.

Ready for the next step? Let’s peek at the Airbnb and VRBO-specific expenses.

*Note: In the previous article, I accidentally labeled “electric” as “gas” and vice versa. The numbers are the same; they’re just reversed between electric and gas. I’ve corrected it in this spreadsheet.

*Note: I received a payment at the start of March that spans the entire upcoming month (March 2015). To be fair, I estimated the future electric and gas bill for March, as well, even though these are still TBD. I over-estimated both of these, to err on the safe side.

What does this mean?

Traditional Lease: On a traditional 12-month lease, I would have grossed $13,200 and would have none of the Airbnb-specific expenses listed above.

Airbnb Host: By offering this property as an Airbnb unit, I grossed $28,268.35 and had an additional $7,883.24 in Airbnb-specific expenses, leaving me with an Airbnb income of $20,382.11.

Difference: In 12 months, I earned $7,185.11 more as an Airbnb host vs. traditional leasing. This breaks down to an extra $598.76 per month.

One-Sentence Summary: Being an Airbnb host brings me about $600 per month more than traditional long-term leasing, after adjusting for the added expenses. Score!!

This is remarkably similar to the monthly average I concluded during the 8-month update, which shocks me, since I had a three-week vacancy in December around the holidays. We’re analyzing a larger sample size, so outlier months don’t skew the results as much.

What’s Your Hourly Rate as an Airbnb Host?

In previous updates, I’ve calculated my hourly rate as anywhere between $54 to $92 per hour. I haven’t logged my time, but two hours per turnover is a reasonable approximation. That’s 90 minutes of cleaning and 30 minutes of emails, texts, and other administration. I’ve hired a housecleaner on a few occasions, but I also take care of miscellaneous oddities, so we’ll call it even.

I’ve now hosted 55 guests, which comes to a total of 110 hours. An additional $7,185.11 over the span of 110 hours equals $65.31 per hour.

I’ve done most of the housecleanings myself, although I don’t recommend this. I personally chose it for four reasons:

I live in the building (no transit time)

I make my own hours (total flexibility)

I enjoy a break from staring at a computer screen. (I like the novelty of a few hours of ‘hands-on’ work, even if it’s low-paid labor. That’s the same reason I fold my own laundry instead of hiring it out, at least for the moment.)

I had trouble finding a reliable housekeeper (one cleaner arrived several hours late; the other no-showed), so I got into the habit of doing it myself — admittedly, that’s a temporary band-aid solution and not something I recommend if you’re in this for the long-haul.

FAQs:

“What about your mortgage?” — The experiment compares long-term leasing to short-term hosting. We’re comparing between Scenario A and Scenario B. Property-wide costs (like the mortgage) are constants, not variables, so they don’t affect the outcome. (Plus the mortgage covers the entire triplex, not just one unit.) This article shares full details on all triplex expenses, and this article shares critical information on how to evaluate a rental property.

“What about that one bad guest?” — Yes, I’ve had that one terrible guest — and I’ve had to remind myself to climb back into the saddle and keep riding. The reality is that I’ve hosted 55 guests, and 54 of them have been awesome. No reason to let one bad guest spoil the party.

“Do you leave a gap between check-in and check-out?” While I know other Airbnb and VRBO hosts who choose to leave a one-day gap between guests, I’m willing to book the unit with back-to-back guests, since the “value” of a vacant unit represents an opportunity cost of $100 per night. This does create additional stress, though, especially when a guest checks-out late and the next one arrives early.

“What are consumables?” — Soap, shampoo, paper towels, sponges, detergent and other household goods, as well as housewares that need occasional replacement, like worn-out doormats, broken wine glasses, and air mattresses that spring leaks.

“Why do you have cable TV?” — Customer service is my #1 priority. I’ve never purchased cable for myself — literally, never — but if this gives my customers a better experience, I’m happy to buy it. This is the same reason I bought a dedicated wifi router: yes, it’s more expensive, but it gives the guests faster wireless internet, which makes for a better customer experience.

Wow, are you still reading? Alright, if you’re super-into the idea of Airbnb hosting — don’t miss this next section. Here’s the culmination of a year’s worth of (hard-won) wisdom. Think of this as a shortcut for you. Here are 10 lessons I’ve learned as an Airbnb Host.

#1: This Isn’t Real Estate; It’s Hospitality

Traditional rentals are “commodities.” You’re leasing four walls and a roof, plus the most bare-bones level of service (urgent repairs).

Airbnb hosting is service-sector hospitality. Your role is closer to that of a hotel concierge than a landlord. You offer guests a complimentary bottle of water; provide directions to nearby landmarks; answer questions about the weather. You’re not leasing some assembled drywall and roofing shingles; you’re selling an experience and a feeling.

#2: You Learn Awesome Customer Service

Because hosting falls into the “hospitality” industry, you’re competing on great customer service — which means you learn these skills quickly.

For example: Technically, Airbnb says that the host should provide enough consumables to get started for a week, and long-term guests should replenish supplies. When long-term guests ask for more laundry detergent or trash bags, I could theoretically point to that page on the Airbnb site, and say, “Not my problem, yo.”

But why act petty? Just buy the damn detergent. It takes 10 minutes, it costs $5, and it results in a happier guest. #CustomerServiceVictory. Remember, you’re selling an experience, not just four walls and a roof.

#3: Most People Suck at Negotiating

Roughly 1 in 10 potential guests ask for a discount, but they phrase it in the most ludicrous manner:

“We’re coming to Atlanta for a friend’s bachelorette party, and we’ve spent a lot of money on her wedding. Can you lower your price to $50 a night?”

Uh, no.

Reason #1: Humans vs. Business

First, these guests don’t realize that they’re asking me to subsidize their vacation out of my own pocket. I put that money towards the mortgage.

When you’re an individual, some people don’t recognize that you’re also a (one-person) business — just as David’s Bridal and Absolut Vodka are businesses. These guests aren’t asking the liquor store or the bridal-gown shop for a discount; why should they expect one from me?

My theory is that they’re comfortable asking because:

I’m the final decision-maker, so I have the authority to haggle.

I’m a human, not a faceless enterprise, so (some people) don’t consider my need to get paid for my time, effort and risk. They feel like they’re crashing at a friend’s house.

Reason #2: Wants vs. Needs

They’re asking for a discount on a “luxury rental.” Appealing to my sense of charity doesn’t makesense when they can choose a cheaper option.

Whenever I get a Subsidize Me request, I respond with:

“I understand your budget might be tight. I recommend searching Airbnb for listings that are in shared units (roommate-style), which are cheaper than renting a private home. You’ll share a common kitchen and living area, but you’ll pay a fraction of the cost.

If you want a private space, rent in the suburbs. Homes that are 15 to 20 minutes away will be much cheaper than a unit in the heart of Midtown. A few safe, clean suburbs within a 20-minute drive include Marietta, Norcross, Dunwoody, Sandy Springs and Vinings; they’re all family-friendly neighborhoods with more affordable units.

Finally, if none of those options work, there’s a Super 8, Motel 6, Red Roof Inn and a handful of extended-stay motels within two miles; all have rates in the $50 – $60 per night range.”

Here’s the surprising bit: I assumed most of those guests would disappear after getting that response. Unexpectedly, many of them book the unit at full price. Whhhaaaa??? (How did they magically get the money?)

Reason #3: Self-Interest

All that aside, here’s why their question fails: They’re thinking only about themselves.

What’s a better negotiation strategy? Put yourself in the other person’s shoes. Negotiate based on their needs, not your own.

For example:

“I notice your unit is vacant this upcoming weekend. I assume your chance of securing a last-minute reservation is slim. Let me propose a deal: If nobody else books your unit at full-price by Friday at 4:00 p.m., will you rent it to us at half-price?”

“This way, we won’t be taking the spot of another customer who would pay full-price. We’d only be filling what’s otherwise a near-certain vacancy. We’ll be out by Sunday at 10 a.m., so you’ll have an extra hour to process the turnover for the next guest. What do you think?”

Notice, by the way, that this is how I structured the Subsidize Me reply: I address their needs, not my own.

I could have said:

“Sorry, but after paying for electricity, gas, local taxes, cable and internet, the full-price-rate isn’t exactly a “cha-ching!” At half-price, I’d be losing money.”

That reply wouldn’t be effective, because — frankly — the guests don’t care about my profit margins. (That’s perfectly fine; it’s not their job to care.)

That’s why my reply addresses their stated needs — finding cheaper accommodation — rather than talking about my own. If a guest truly can’t pay my rate, then my reply is helpful: it informs them about low-cost alternatives. And if they’re just trying to squeeze me for a buck, my message is clear: You’ll have to look elsewhere.

#4: You Meet Fascinating People

As an Airbnb host, you meet people who leading thrilling, incredible lives you can’t imagine:

Husband-and-wife professional dancers who perform together in Broadway’s The Lion King as it tours across the nation.

Ohioans who travel 250+ days a year, selling homemade clocks at summertime festivals.

Costa Ricans who fly to America specifically for an electronic music party.

A Japanese nuclear-engineering student who came to the U.S. for a summer internship.

A Swedish woman who encountered IKEA for the first time while staying at my unit. (She doesn’t have an IKEA in her Swedish town.)

Best of all, we were the honeymoon destination for a newlywed couple who checked-in within 48 hours of saying “I do.” (They were moving to Atlanta and needed a place to stay while searching for long-term housing).

Meeting people from across the world is one of my favorite aspects of traveling; I love that I can replicate that experience by “bringing the world” to my home.

#5: It’s Tough to Travel

Ironically, it’s tough to travel while you’re hosting other travelers.

This is a location-stuck side hustle, not a location-independent enterprise. That automatically means that it’s not-for-me in the long term, since my business decisions hinge on the question: “Is this a freedom-fueled lifestyle business, or is this a shackle-me-down job?” It’s tough to manage a hospitality-based, service-based business remotely while you’re surfing in Costa Rica.

(One reader recommended telling the guests upfront if you’ll be out-of-town during any portion of their stay, so that they can voice any special requests ahead of time. #BestIdeaEver)

(#IUseTooManyHashtags)

#6: Set Expectations Upfront

There’s no clear “model” for the Airbnb experience: Are you staying at a hotel? Crashing at a friend’s house?

Due to this ambiguity, there’s no clear set of expectations. Some people are comfortable with “whatever,” while others expect the same service they’d get at a 5-star hotel.

Prepare for this by providing every item you’d typically find in hotel rooms:

Ironing board

Coffee maker

Hairdryer

Full-length mirror

Many, many towels and hooks

Guests have recommended everything ranging from a toaster to a blender to fuzzy foot slippers. How do I separate great suggestions from outrageous ideas? Use the Sheraton Standard. My litmus test is: “Would you find this at a 4-star hotel, like the Sheraton or Hilton?” If the answer is yes — like a hairdryer — I’ll provide it. But if they’re asking for a custom pair of fuzzy slippers, well, that might be a step too far. (Ohhh! Was that a pun?!)

(I’ll see myself out now.)

#7: Complaints Are a Way of Life (But Don’t Let Them Bother You)

I joke that the main lesson I’ve learned is that there’s no flippin’ limit to what people will complain about.

One guy complained that there’s a step between the kitchen and the adjoining bedroom. He’d prefer the floor be step-free. (He has no physical limitations, BTW. It’s a second-floor walk-up.)

One person complained that there’s no rocking chair for reading, so I added one, and the next guest complained that the chair took up too much space.

My personal favorite: The guest who called to say that they couldn’t enjoy the balcony because the weather is too hot and humid. Like, why are you calling? What do you want me to do?

You can’t please everyone. All you can do is meet “the Sheraton standard” (as I call it), ask for feedback, and relax. I have a 5-Star average rating on Airbnb, which tells me I’m doing a good job.

#8: It’s Emotional

Hearing negative responses to your own home — however infrequent they may be — is emotionally tough.

One harsh reality of monetizing your house: You open your home to public criticism. In that regard, it’s similar to writing a book or blog, playing music or undertaking any other creative act. You create something that’s deeply personal (like remodeling your home), put it into the public arena, and …. you’ll have fans, and you’ll have haters.

Here’s the corollary: You can have 54 amazing, kind, wonderful guests and just one solitary f**ker, but the latter is the one who consumes your mental attention. (In that regard, it’s a bit like reading Internet troll comments.)

#9: Rapid-Fire List of Tactical Tips for Airbnb Hosts

Here’s a brain dump of tactical tips I’d share with other Airbnb hosts:

Clean the awkward space between your window ledge and the outside world (the outer window ledge).

Check the inside of the microwave, dishwasher, oven, and all drawers, in case the guests left anything behind.

Never rent to high schoolers.

Set expectations clearly, especially around check-in procedures. A lot of people think it’s okay to show up at anytime, as if you’re going to be there 24/7. Again, that goes back to the “hotel” framework: people are used to showing up to a hotel at anytime, so some people project that same expectation onto their Airbnb host. Be clear about what time is appropriate for check-in, and include this in your welcome email.

Create a list of “fun stuff to do” if they arrive early (before check-in time) — recommended restaurants, cafes, coffee shops, parks, etc. Include this in the welcome email.

Write the directions to the house in the welcome email; don’t just tell them to GPS the address. It shows an extra level of service.

Replace the shower liner (that plastic liner) every few months. No matter how spotless the rest of your house, if the shower liner has soap scum, the rest of the place will “feel” unclean.

Seriously, don’t rent to high schoolers.

#10: The Bottom Line

At the end of the day, here’s the ultimate conclusion:

The money I’ve earned as an Airbnb and VRBO host is better than what I’d collect as a traditional landlord. But that comparison is apples-to-oranges. One is active; the other is passive. One is hospitality; the other is real estate. They’re not the same industry.

But they are both fascinating. But they are both fascinating.

And they can both be lucrative.

~~~~ P.S. Use this link for a $20 Airbnb coupon, plus a list of top resources for Airbnb hosts.

Learn How To Escape the 9-5

Get free updates on building wealth and living to the fullest.

Zero spam.

Success! Now check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

First Name

Your Best Email

We use this field to detect spam bots. If you fill this in, you will be marked as a spammer.

Comments

I don’t own any rental properties so I’ve never been an Airbnb host but I absolutely love using Airbnb whenever I travel. I just booked a flat in Tokyo for about $130 a night, a hotel would be closer to $200.

Thanks so much for the update with all the finer (and not so fine) details. My lovely wife and I are considering trying an experiment like this here in Dongguan, and you’ve given us a MUCH firmer basis to calculate the benefits and drawbacks, in cash as well as time and energy.

I knew these opportunities existed but had never heard the terminology. It’s definitely an option when traveling to lower costs. I remember traveling in Europe and could not believe the prices of hotels with their smaller spaces, especially Paris!

I used a combination of Airbnb, staying with friends, and hostels when I spent three weeks in Paris about a year and a half ago, and these were key to plummeting my travel costs. More savings = traveling longer!

After two years of 19 hour days, and 51 days to go (not that anyone’s counting), we’re breaking the chains of “real jobs” for a while, and will spend 2 1/2 months traveling Europe this fall with myself, my hubby, and our rock-star 4 year old daughter. We rented from HomeAway for both the places we’re staying, and it was at least 75% cheaper than hotels. I can’t vouch for the quality quite yet, but we only picked places that had several positive and no negative reviews.

Not too young! My sister lives in England, and I started taking my daughter for month long stays when she was two :). Carry food and beverage for the long plane ride – kids need to eat/drink when THEY want to, not when it’s convenient for the airline. Carry toys, books, age appropriate electronics with headphones or earbuds. I actually took sleeper pjs, and my daughter told me when she was ready for bed that first trip. We brushed teeth, put on pjs, and she slept her way across the Atlantic. Carry a good first aid kit. Most importantly, carry patience, and understand that your priorities with young children have to be making sure they have a good time while ensuring they don’t ruin it for anyone else. Kids love stories – tell them the stories about what they are seeing. Make sure they see more than what is at eye level for them. Find reenactment events – my daughter through the years has helped Roman soldiers tend their armor, masons repoint the brick at old cathedrals, pick vegetables on estate farms, danced with grand “lords and ladies”, and much more. Don’t try to pack too much in, and leave time for naps 😉 – for kids and adults lol!

This is an awesome article! I clean for an Airbnb host in Philadelphia. I’ve been wanting to get into Airbnb for a while because I don’t want to just wholesale or rent houses, I want to address the lack of solid customer service in the market as a whole. But this is a good start! Thanks ☺

@Stefanie — Haha, I’ve heard a few people say the same thing! 🙂 That negotiation strategy works because it’s a win-win for both parties. The alternative negotiation (“hey, we already blew our budget on this wedding, can you cut us a deal?”) is a win-lose, rather than a win-win.

I JUST used this approach on a booking for a wedding this weekend. The rate was 45/night and I asked for 30. I know that’s cheap, but I really DID blow my budget on the wedding this time! And just split with the fiance so it may be only me.

Let’s see if it works!

I’m also considering purchasing a 2-bedroom townhome intending to rent out the master. I’m trying to find a good site or place to help me estimate how much I could fetch a night. How did you pick your $99?

Yes you can offer the whole or just part of a space. You set up 2 listings. You just have to be careful to manually keep the calendars up to date. Register on the site and under Groups, join the New Hosts Forum for lots of info. As for pricing, you research similar places in your area and get a feel for what you are offering compared to the competition, keeping in mind your expenses. Airbnb will populate your calendar with their own suggestions – predictions of what you ~maybe~ should charge. There are also a few paid services that will do it. Good luck!

Me too. Great responses. I have an Off Grid Airbnb in Eastern Oregon and so far we as a retired couple are having a very positive experience. We reside in the home and just have a separate listing for each bedroom. I love their app so far as it keeps various overlapping bookings clear. Our County has no tax on rentals, etc., we have no electric or utility bills as we are off Grid and water and sun are still free. Our costs are the consumables, breakfast food, and we anticipate – maintenance. I am waiting for the air mattress to fall apart. Love having the world come to our front door. I have kept track of costs and they are running less than ten per cent.

Thanks for documenting your journey, Paula. I’ve considered this AirBnB route numerous times but have not pulled the trigger. I’ve looked at a few properties that would specifically suit this purpose but when I run the #s, the return is pretty much comparable to what I’m getting from my student rentals, but the amount of work with the long-term traditional rentals is way less. So for right now my ROI (both time and money) is better served with the traditional model. Not to mention, they are having lots of political discussion in my city about the legitimacy of renting rooms/homes out via AirBnB as many government officials and higher ups consider it to be a “hotel” and since the majority of these properties are not zoned as hotels/commercial, it is a big gray area that is still trying to be worked through. I really think AirBnB will win out, as you can’t resist change forever, but it’s another consideration.

@Tiffany — Yeah, different cities are handling this paradigm-change differently. Some cities, like NYC, are really frowning on Airbnb and coming down on them hard, while other cities are more relaxed. The same is true for Uber and Lyft — some cities with strong taxicab interests, like Las Vegas, have really cracked down on Uber and Lyft, while other cities are relaxed about this new business model.

I just road-tripped from Tampa to NYC with airbnb. We stopped in North Carolina (white water rafting at olympic training facility), NYC (brooklyn for a wedding), Maryland (six flags), and Augusta, GA. We used UBER the whole time we were in NYC. It cut the cost of the trip practically in half.

I love some detailed spreadsheet info, and it’s good to see the AirBnB yield broken out on an hourly rate. It seems fairly certain, though, that this wouldn’t be able to scale to, say, 5+ airbnb units unless you were really willing to consider taking it up as a part time job–not a bad gig, just something that a prospective hotelier would want to keep in mind!

Since this is a problem for you, do you know how long you intend to stay in the VRBO game?

Hi Charles — I’ll be dropping out the Airbnb/VRBO game this summer … I wanted to stick through to the one-year mark, but because I’m interested in passive income (rather than active income), and because I like location independence rather than location-stuckness, Airbnb/VRBO just isn’t for me in the long run. Right now I have guests who are booked through May, so I’ll probably drop out of the game in June or July.

AirBNB has been a boon to my new, corporate free life. Luckily I have the flexibility to bounce out of my sf apt, and dogsit or stay at my girlfriend’s place.
I am going to add some additional amenities, such as having a dryer, etc.
I love hosting. Luckily, in SF there are concierge services that can manage the check in process and cleaning. So I’ve been able to do this remotely and road trip a bit.

@Gina — My CPA handles everything; just keep great records of all your revenue and expenses, and then turn it over to a tax professional. I’ve recently started using LessAccounting.com for my bookkeeping, and they’re amazing — it’s like Quikbooks for people who don’t like Quikbooks.

I was under the impression Airbnb sends owners a 1099 which would then be subject to self-employment taxes. I didn’t notice if that was in your net profit. Long-term rentals on a lease are not subject to self-employment tax. (I have a tax advantage because I’m in real estate so I don’t know how your tax situation would be.) I think you would still come out ahead with Airbnb but not by as much.

Plus you have to factor in the cost of furnishings for an Airbnb. If you do it for several years, it would probably still come out ahead.

In a sense, I would think that renting it out AirBNB style might be better. Sometimes, you get a renter that is…well, not the best, and how do you get rid of them without much of a hassle. With AirBNB, you can have “clear” schedules for having your own guests over, etc. drawback, though, is having it “full time” that you expect. Look at the scales…and maybe even try for a month or two, would be my suggestion (who just started looking at this a couple of hours ago. *lol*

Thanks for the great info. I’m a traditional landlord but I have the opportunity to add an extra dwelling to one of my properties so I’m going to try it on Airbnb before renting the traditional way. I’m glad to hear it was worth your while, $600 per month extra is not be sniffed at!

Yep, I mentioned Guesty in Part 3 of the series. They handle the online component of management (bookings), but they’re NOT the boots-on-the-ground management. In other words, they’re unable to respond to guest requests like “Can I get another pillow?” or “Where’s the plunger?”

Unfortunately, the online component (bookings, emails) is the easy part. What I really need is a company that can be here in flesh-and-blood. There are some startups who have pilot projects like this in Los Angeles and San Francisco — and who knows, perhaps NYC? — but there’s nothing like that in Atlanta, unfortunately. At least, not yet. 🙂

You wrote this is March. Have you since heard of any companies/ individuals willing to be your face? I live in Minneapolis and have a second home in Atlanta that we’ve rented out for about 5 years. We would love to do Airbnb but are thinking through who can serve guest there while we are in MN. Plus we’ll pay a lot up front to furnish a 4 bedroom house. We’re also interested because we want to stay in the house on our trips to Atlanta. Any suggestions for us? We need to rent about 8 nights out the month to make this work for us. Still worried we’ll buy furniture, still have a mortgage and not enough renters. :/

@Shannon — In Atlanta, I’m still only aware of companies that offer digital (online) management, but to the best of my knowledge, there still aren’t companies that offer boots-on-the-ground management (at a reasonable price). There are some companies that offer Airbnb boots-on-ground management in New York / San Fran, but nothing in Atlanta. There are several vacation-rental-property-management companies but they often ask for a 40-50% cut, which can’t be supported by Airbnb rates.

If you wanted to pursue out-of-state hosting, your best options are:

(1) negotiate with a vacation-rental-management company for a better rate;
(2) find a local cleaning person who’s steady and reliable; someone who can handle every turnover, re-supply the house as needed, and serve as “on-call” support. (Ideally, this person would also live nearby.)

Option #2 is easier said than done; finding and hiring a reliable person can be tough! I’ve hired plenty of people who show up late (or who don’t show up at all). I’d recommend staying in Atlanta through the first few turnovers while you “test” this individual to see how well he/she performs. The success of your business hinges on the quality of person you hire.

Love this post. We considered Airbnb as an option during my 5 month galavant in Europe (my sister taking care of the details), but just couldn’t stomach the idea of having people in my place while I was away.

On the other hand, one of my rental units is coming up on 3 years of being an “Executive Rental” and we’re looking at switching it over to a traditional lease model.

One thing that is important to remember, at least in the U.S., is that, even if you are zoned for short-term stays, most areas require that you get a hotel occupancy license and make monthly reports of your revenues, or lack thereof. The license is generally required for stays of less than 30 days, and, as an owner, you will need to collect a hotel occupancy tax for these short-term stays. It is also important to make sure that your HOA, if you have one, allows short-term rentals.

@Jeanne — The HOA issue is extremely important; the last thing you need is a cease-and-desist letter from your homeowner’s association!! I’ve reflected the sales and occupancy taxes in the expenses portion of the spreadsheet; you can see this on the top line. Once you start to get into the real estate business, regardless of whether you’re handling short-term or long-term rentals, my best advice is to hire a licensed CPA and get professional bookkeeping. Your CPA can offer both local expertise and strategic planning.

Hi Paula,
I so appreciate all the detail and clarity you provide around being an Airbnb host. It is something I’ve considered for my guest room. Right now, I have a full time renter who is working very well with the added bonus that he loves to clean! Every week he does the floors, dusts, and cleans both bath rooms. If he decides to move on, your data will be extremely helpful in deciding wether or not to go the Airbnb route. Thanks!

@Kathie – Thank you!! Congrats on having such an amazing renter (renters who love to clean are the BEST!) and I’m glad I can help you figure out what decision to make after he eventually departs. 🙂 My guest room is currently occupied by some pretty amazing renters, too, so I know how much of a life-changer an awesome renter can be!

This brought tomy mind one of the coolest stories I’d seen in a while, what may well have been the collab of the century, Airbnb coupled with an Ikea in Australia(I believe) for one night only. People could literally sleep on the beds, eat all the Swedish meatballs, the whole deal.

Excellent report, Paula! My guest house tenant came for three months and stayed an extra 8 years. He just left. I am considering dipping my big toe in the AirBnB pool. Can you shed light on what your vacancy rate was for the year? Thanks, Chip

I’d like to offer a somewhat different perspective on AirBnB. First and foremost, I’ve been following Afford Anything for a few years now and overall, I love it. I have great respect for anyone like Paula who is willing to work hard, drum up a side hustle, pay off debt and invest.

That being said, as a person who has been involved in couchsurfing (www.couchsurfing.org, for the uninitiated it’s essentially AirBnB without money changing hands), I find the upward trend in short-term rentals to be unfortunate. I’ve couchsurfed the world over and hosted surfers from around the globe. Each experience has been truly priceless. I’ve been laughed at for giving away for free what I could be turning a nice profit on. These calls have gotten louder as the AirBnB effect has grown. I’ve also seen a uptick in the number of people who have joined the couchsurfing experiment expecting to be able to use it as a free short term rental and trying to treat my home as a motel. I can’t say for sure that this is solely due to AirBnB, VRBO etc but it’s not a stretch. Furthermore, I wonder what effect this short term rental mania will have on neighborhoods. Here in Austin, many of the trendiest, most liveable neighborhoods are getting bought up by off-site investors who turn around and rent them out short term. The prices in these nice neighborhoods spike and suddenly the residents are surrounded by unlicensed motels. Yes, the city has passed ordinances to curb this trend but they’ve proven all but impossible to enforce.

For me, I know that as soon as money enters the equation the relationship between the participants in the experience changes substantially. All the amazing connections I’ve made over the years of couchsurfing would be qualitatively different had I followed my friends’ advice and put a dollar amount on my spare bedroom. While I don’t necessarily begrudge others for entering the short term rental market, it’s not a trend I care to be a part of, regardless of how many benjamins I may be leaving on the table.

@Luke – Those are excellent points. I love couchsurfing.org and I’m an active participant on that website. I’ve used couchsurfing to both host guests at my own house, as well as stay with local hosts in the places where I’ve traveled. When I lived in Boulder, I hosted travelers from across the U.S. who would stay at my apartment while they snowboarded or skiied; I still keep in touch with a few of these connections. Before we started dating, Will once hosted a Couchsurfer from Tel Aviv who was visiting Boulder; years later, when we went to Tel Aviv, that same person hosted us.

In my experience, Couchsurfing is ideal for laid-back travelers who want to form friendships with locals. I say “laid-back” because Couchsurfers must be relaxed about both the quality/cleanliness/amenities of the space itself, and also about whether or not they’ll even find a place to sleep. In high-demand cities like Paris or Barcelona, for example, it’s hard to find a place to stay as a Couchsurfer, even before the invention of Airbnb, simply because demand outpaces supply. When I was backpacking Europe, I used Couchsurfing.org to stay with locals in smaller towns in Portugal, but no amount of effort led me to find Couchsurfing hosts in major cities like Vienna or Rome.

The most important thing to remember about Couchsurfing, though, is that it’s purpose is not to be ‘free accommodation’ — its purpose is to foster relationships.

While that’s an admirable goal … not every traveler wants that. Friendships require time and effort; some travelers just want to be left alone. (Example: honeymooners, business travelers, introverts, partying groups who are coming to town for a bachelorette party.) These guests don’t want to go out for coffee or drinks with the host. Therefore, they’re not suited to be Couchsurfing guests.

In other words: Couchsurfing is similar to a “homestay” experience; Airbnb is similar to a hotel experience.

Airbnb is geared towards people who want different things: 1) The guarantee of a place to stay, in the form of an “official reservation”; 2) A space that’s held to a higher standard of cleanliness/amenities/quality; and 3) Limited-to-zero interaction with the hosts; they’d prefer a private space where they can be alone. (#3 is probably the biggest differentiator.)

When I’m traveling, I’ll search Couchsurfing.org if I’m in a relaxed mood; I have extra time on my hands; I want to make local friends in a new country. In short, I’ll use it during instances when I’d LOVE to grab dinner and drinks with my Couchsurfing hosts.

But if I’m only going to be somewhere for 4 days and I’m going to be busy working during that time, I’d much rather use Airbnb, since I functionally need a motel/hotel rather than a homestay experience.

All this said — I think this is an important piece of the dialogue. I would never want to see Couchsurfing tarnished; it provides a valuable and important function to the traveler community. Thank you for raising this point.

First of all – best blog ever on personal finance. Second – fascinating discussion on airbnb – which is how I found it. I’ve been a user of airbnb while I lived in Europe – and then when I moved back to the States. I think airbnb is mainly for people who want a great travel experience but are also on mission-oriented trips. In other words – they are on the trip because of a reason besides meeting their host. When I’ve used airbnb it was because hotels were either ridiculously expensive, or because the experience of a hotel I could afford was not what I was looking for on the trip. I’ve done airbnb in Amsterdam, Barcelona & Nice – and then long term in Washington DC. The best places are ones that provide the kinds of things Paula is talking about. It’s about ease of use and about making it similar to a hotel experience.
I’ve done a range of airbnb types – which is I’ve stayed in a rentable room with the host in another bedroom. I’ve rented two whole apartments, and also another whole apartment with the host living in the same building. All the hosts were great – I think using the rating system is a good idea.
Anyway – just my two cents. I loved following how many benjamins you made on your side hustle!

Good timing! I’m considering exchanging a long-term rental property for a short-term property in a location I want to spend a couple months a year in and maybe relocate to in a few years.

My situation will be a bit different – I’ll have to employ a regular house cleaning service and figure out how to deal with access to the unit (I think there are electronic options now?) since I won’t be anywhere near when the renters are there. It also makes the case for the new short-term rental to be a condo so I can contract with the on-site condo management for emergency repair services.

Personally, I’ve used VRBO (and it’s European competitors) many times and just returned from my first Abnb rental. VRBO has opted to go with insurance to deal with guests who damage the property, and I know Abnb has had to add some coverage – would either of those mitigated the one problem tenant you encountered?

Also, I’d add one more tactical tip – use all white linens and towels (like most hotels do).
– mismatching sets are less obvious and all can be bleached to assure cleanliness.

I’ve owned and operated a VRBO rental home for 5 years I’ve hosted dozens of guests and really only had two bad experiences (unless you count really messy ones). I require a $300 damage deposit and that seems to make most people take care of the home. I have an electronic programmable lock and each guest gets a personal code (last 4 digits of their phone number) so check in time is up to them. A few personal touches, a gift of snacks and photo of my daughter (the house is named for her), help guests feel less like they are staying in a hotel and more like a home.

In my experience, hagglers have a significantly higher chance to fall into the category of guests that take up the most of your time and cause the most headaches. I stopped renting to hagglers (even at full price) for that reason. Have you made similar observations?

@Steve — It depends on how hard they try to haggle, and how many other questions they ask. If someone sends me a simple note that says, “What’s the best deal you can offer?” or “Could you knock 20% off?”, and I say no, and they drop the subject, then in my experience they’re fairly good guests. But if they send a note that’s peppered with questions ranging from “Is breakfast included?” to “Do you have a toaster?” to “Can you send me directions from your house to X location?” and also ask for a discount, or if they ask multiple times, that’s a giant red flag.

I am actually with Steve on this. When I started renting many moons ago, I was quite accommodating – entertaining the back and forth emails with potential guests for reduced rates etc. These days, as soon as they ask for discounts, I drop them. As from previous experience, these guests tend to be high maintenance as they feel that they pay me and deserve my arm and leg.

Absolutely true! I also regret having hosted a haggler who turned out to be the tenant from hell, and when I suggested that a different placement might be best for him, he wrote me a ‘revenge review’ that was like two pages long! Unfortunately, airbnb’s policy is to go ahead and publish such review, forcing the host to write a public response–all of which is the first thing that pops up when people browse your property, pushing back all other reviews (in my case stellar)–and asking herself whether or not it was even worth it to put in all the effort to be a gracious host (since those ‘reviews’ cannot be removed) :-/

@Synta – Yes, of course it is! All of these are documented, legitimate and necessary business expenses, so they’re all tax-deductible. (Major repairs, like adding new windows, are considered “capital improvements” and are depreciated over time; expenses that are consumed within one year, like toilet paper and housecleaning, can be written off in a single year.)

One of my pet peeve is when airbnb hosts respond back with what you stated along the lines of, “this isn’t a luxury hotel, it is airbnb”. I had a unit I rented in Oahu and the host would not stop responding with the line, “If you want x or y, you should have booked the Marriott at Waikiki”. I wasn’t asking for anything extravagant. I wanted her to check some droppings in the guest bath! It turned out to be termites!

@Harryho — Checking droppings in the bathtub is a totally reasonable request: It passes the litmus test of “Would the Sheraton Hotel do this?” or “Would the Marriott Hotel do this?” It sounds like your host in Oahu wasn’t being a very good host.

I put my foot down when a guest makes a request that even the Marriott or Sheraton wouldn’t provide. “Can you please deliver me a pair of fuzzy slippers, size 8?” Hotels don’t even do that. The Ritz-Carlton might, but the Marriott or Sheraton certainly wouldn’t, and therefore it exceeds the bounds of a reasonable request.

I’d like to see an entire post about your experiences with Airbnb and High-Schoolers. It should be interesting, since you obviously have a strong opinion. I can imagine a couple reasons not to rent to them, but I’m sure I’ll be educated and entertained by your experiences. 😀

@Matthew — Haha! There’s not really a story. I live close to a high school, so I occasionally get requests from highschoolers who clearly want to rent the place as a party pad for a night. Warning signs include: they signed up for Airbnb about 5 minutes before making the request; they indicate that they live in the same neighborhood; they say things like “I just want a peaceful place to relax.” (Yeah, right!!) I’ve never rented to them, thank goodness. That’s a liability I don’t want!!

I read your entire journey last night and boy did it change my perspective on short term rentals. For that I thank you! I will be inheriting a property after we get through probate and was considering my options. What you provided here is invaluable in helping me to better understand the challenges.

My property is in the Savannah area with an estimated income stream similar to yours. He house has no debt, but is in dire need of an update whether I go traditional or short term. The short term appealed to me because I like the idea of being able to use the property for personal use and have an income stream along the way.

I have a full time job (with travel) and live out of state so if I cannot solve the boots on ground management piece, traditional seems to be the better option…I do have another option that would involve my sister who lives next door to the property, but not sure it will work for her or me. I definitely will be consulting with a tax professional before I do anything!

I had planned to hire a management company to handle and not use VRBO or AirBnB. I know you indicated it would eat through through your gains, but it seems like there should still be some meat on the bone. What do you recommend when looking for someone to manage short term rentals?

@Andy — Look for a company in your area that specifically manages short-term and vacation rentals, preferably a company that’s been in that field for several years (before the rising popularity of Airbnb).

Avoid the companies that provide only “digital management” without a boots-on-the-ground presence, as that’s not going to be enough — you’ll need a company that can manage the cleaning staff, contractors, etc. (Thanks to the popularity of Airbnb, there are now several new startups, like Guesty and AirEnvy, that provide “online management,” meaning that they’ll field inquiries, etc. That’s the easiest part of the job. The most demanding part are the tasks that need physical in-person presence.)

Most traditional property managers won’t have experience at this, so search specifically for vacation rental management experts. Just Google that term, plus the name of your city, and interview the companies you find.

Hey, As far as being out of town while hosting there’s a site called PILLOW that does the cleaning, booking, guest relations if you are out of town. They charge 15% of bookings. Wonder if anyone has used them…

@Elizabeth — That’s the same company as AirEnvy (it rebranded and relaunched as “Pillow.”) In most cities, it ONLY offers online management, but no boots-on-the-ground servicing. In other words, it’ll send emails on your behalf, but it can’t walk through the unit after check-out to inspect for damage, or intervene if the cleaner doesn’t show up. In limited cities, it offers flesh-and-blood services, but as of now, that’s only in three cities: L.A., San Fran and Seattle. They don’t service Atlanta or any of the inland cities.

7 months ago we went to court to evict a year round tenant that did not pay rent, harassed neighbors and we suspect engaged in drug activity. Since we live above that rental here on the beach, this concerned us for our safety, peace of mind and quality of living. We thought long and hard about it and decided we liked it more empty instead of the headache with long term tenants,

We also learned long term tenancy requires more renovations to recycle the rental property experience with a new tenant. Se we spent 7 months renovating and enjoying the peace and quiet. We took our time, made some financial sacrifices and started a new chapter on our property.

This weekend we hosted our 1st Airbnb guest in our lower beach rental. This experience has many emotions, thoughts, what to do/not do, leave or stick around, be social or let them be, did we forget anything?(Hell no, they only things they needed were clothes and a phone charger) ……

Our guests stated we went above and beyond their expectations. We are proud of this as this entire 7 month journey has been therapeutic. We’ve learned a lot about ourselves. Having a favorable experience 1st time out means I can relax. I got this 🙂

I LOVE that although you decided that you didn’t want to host a long-term tenant, you didn’t give up. You didn’t say, “I can’t do this.” Instead, you said, “HOW can I do this?,” and you found a method that works for you — Airbnb hosting. You took your time, thought carefully through every detail, learned about yourself in the process, and enjoyed the journey as much as the result.

Your story is an inspiration to every other reader on this website who’s wondering whether or not Airbnb hosting is for them. Thank you so much for reading, and for sharing your success!

@Mary — If your property is located on a beach — or in another area frequented by vacationers — then a 1-week minimum requirement may work. If you’re located in a city, where you’ll attract business travelers, conference attendees, weekend concert-goers, and others who will only be visiting the area for 2-3 days, this type of situation won’t fit your customer base.

As always: Put the customer first. Devise a strategy around their needs. This will give you the best chance of getting plenty of bookings, positive reviews, etc. In that sense, it’s a win-win.

What an excellent series, and a great read! We’re also Airbnb hosts, going on three years now. We rent out three different units which are all on the same property (a duplex and a detached cabin) and we live in our own house just around the corner.

For us, the biggest advantages to Airbnb over a traditional rental have been two-fold: firstly, we do not live in an area which can fetch a lot on the rental market, so even with high winter vacancy, the numbers bear it out. But secondly, I like the continuous access Airbnb-ing gives me to the space. With tenants, I feel at their mercy – even if something’s going wrong in the unit, I can’t necessarily get in right away to address it without violating their privacy, and I certainly can’t get in on a regular basis to keep an eye on how they’re treating the space or if there are any issues cropping up that I would like to deal with. With Airbnb, I can keep things in tip-top shape all the time, as well as work on bigger renovations during slow times.

Perhaps you’ve lucked out with very good long-term tenants, though, or the fact that you’re starting from a fully-renovated space eliminates a lot of these concerns. The units we rent out are in an older home with some dated features, so I feel as though a long-term tenant would slowly (or quickly) get frustrated with certain elements, whereas an Airbnb guest finds them charming (and I can work to improve them over time). And we’ve certainly not always had the best long-term tenants at other conventional rentals we’ve owned. Do you find there’s just something about the guest/host dynamic versus tenant/landlord that seems to make people take better care of the space? I swear when some guests check out I can’t even tell there was anyone there!

Anyway, that’s been our experience. It also helps that we live very close by and work from home, because what you say about it being a side gig rather than a passive investment is very true. And as a side gig, it’s not bad at all!

I also feel like we’ve been talking about further automating forever, but it just never seems to happen. We have the wifi password written on a chalkboard, but that’s about as far as we’ve gotten (I just found the “give directions” feature, so that will help a bit!). Do you have any tips for setting up the automated elements? Have you experienced any pushback from guests who feel uncomfortable letting themselves in? I’ve had the sense that the personal touch (meeting the guest) generates a more positive review, but maybe this is a fallacy? I know I would love a self-serve place myself as a guest, so…

I have used airbnb down time – vacancy periods during winter to whip in tradies to get renos done. Found it handy. We have 2 (other) houses and we rent per room to long termers. This gives us access to the properties whenever we want and renos at them are ongoing.

We have found that the personal touches we add (airbnb unit and the houses) mean that the tenants tend to me more respectful towards the properties. Because we have access, we get things fixed as soon as they occur through a myriad of suppliers. We see ourselves on a different level to normal landlords because we go that extra mile – but all the while having a tight rein on what is going on inside.

I check with people when they’re booking about the times they’ll be arriving. This is especially important if it’s a same day turnaround. Mostly it works out. I allow people in whenever they arrive and have 3 methods dependent entirely on that arrival time – the cafe down the road, the letterbox pickup or the meet and greet. I have two sets of keys on the go. Most people are grateful that they can collect the key at any odd time of the day and night and I haven’t had one complaint about me not meeting them. The only people I personally meet are generally weekend arrivals or those that come late at night from the airport.

Very informative blog. Regarding time spent on managing 6 properties could you answer the following:

How many hours spent Per Week on Inquiries – email, Phone?
How many turnovers in total?

I guess if you catered for 55 guests, thats 54 turnovers and see it being 30 mins per turnover thats 1620 mins, 27 hours for the year on guest communication for the inquiries. Is this correct? I was just expecting this figure to be a lot more for 6 properties.

Great tips. I am a new Airbnb host and I really enjoyed doing it until my last guests who rented long term for 3 weeks, and though their are very sweet people I can’t wait for them to leave.

I read your part about don’t be cheap and buy another container of detergent. Actually this is what I was planning NOT to do. The reason is that it’s not a family but 4 separate people . My washer and dryer works non stop. I am afraid to receive my electricity bill.
They cook separately each 2 times a day, all fried, all meat( I am a vegeterian), I basically have no access to my own kitchen.
Today I discovered that one of them was using my dryer for 7 t-shirts and one pair of shorts plus 2 underwear and 2 pair of socks. They just did several loads n Tuesday, and 3 days later again.
I am still keeping my cool, but hardly.
As a more experienced Airbnb host how do you deal with situations like this.? I don’t want to look cheap and I don’t want bad reviews, but out of 20 guests that I had before no one cooked so much and used my laundry so much. By now I am exhausted, I eat out all the time because there is always somebody on my kitchen. Thanks!

Talk to them! let them know your frustrations. Remind them what was included in the listing and if it is full service 24/7 kitchen/washer/dryer etc. then you kinda have to let them do their thing. On you listing and next guests set clear boundaries and expectations. “Limited kitchen access with microwave use only.” For example. I got my suite set up with a microwave and refrigerator so it’s easier but if you’re not comfortable let them know.

I have the following advice
– don’t buy coloured towels and bed linen because that whitening toothpaste destroys them.
– don’t rent to locals. Along similar lines of high school students, locals have friends and friends have parties and cause problems/mess. My two bad experiences (not on airbnb) have been with locals. When I have challenged locals as to why they need a place their answers have generally not made sense. Heed my warning, they are lying.

With Airbnb, I have taken anyone on as long as they were officially verified with Airbnb. First timers or not, I haven’t had any problems. The only airbnb damage story I have is someone who put the electric kettle on the electric hotplate. They immediately went to the shop and replaced the items themselves.

The difference between income – private long term rent (furnished) vs airbnb is negligible here in Sydney in a good area. Airbnb coming in slightly less in fact, and that’s not counting all the hours for cleaning. The only real benefit to me is that I get to keep an eye on my investment while I continue to consider whether I will sell it on or not. I have used any down time for renovations.

Ok, you have me totally turned on to do this! Thought I was gonna do a flip, but running the numbers, I think hosting a VRBO-Airbnb would actually pay for the house in 4-5 yrs. my major concern is keeping track of the numbers. Could you share what spreadsheet program you use? Yall keep a lookout for a super cute historic home in the best hipster neighborhood in Oklahoma City! Hopefully available by Thanksgiving! Thank you so much gor your words of wisdom!

Interesting site, thank you. You never mentioned how much you pay for your vrbo advertising, could be anywhere from a minimum of $360/yr for the basic plan, to $1195/yr for a platinum listing at the top of their page. Another real cost. Airbnb has just started suggesting the price you should set on your rental, and plans to rate you down as an owner if you don’t get with their suggested price. How do you feel about that? I know what my competition offers, and, if the price is lower than mine, it can be barking dogs, roosters crowing, loud tv’s or arguments next door. There is always a reason, but airbnb can only see a map of the area and chart the rates.

I pay $0.00 for VRBO advertising. They charge a fee for every booking, just like Airbnb does, and this gets taken off the top — pre-gross revenue.

As for suggested pricing, I think it needs to be more robust than simply analyzing a map of your neighborhood. Suggested pricing needs to account for the specifics of your listing. I think some other third-party platforms are a little better at doing this than Airbnb’s algorithm, based on my own experience. I wouldn’t recommend ever blindly accepting the recommendation, but I do think it’s useful as a “second opinion.”

I am an Airbnb host and I’ve had a very good run with it. Got super host status and made some nice coin all while meeting very interesting people.
Then along one woman who has me seriously considering closing it all down. Details aside she was a real witch, if you catch my drift.
After reading this, it gave me quite a bit of perspective in term of human nature and people’s perceptions of what Airbnb is. Your “subsidize me requests” are all too familiar and hilarious. And the complaints, oh the complaints!! I had a woman ask me to wash the windows at 10pm. Not so unreasonable right? Oh by the way, I live in a 30 story high rise, so I’d have to rappel from the roof on a rope or hire spider man to scale the wall with a squeegee – TOTALLY within the realms of reality, right?
One time I left a woman 2 bars of new soap in 2 boxes for a 5-day visit. She later complained there wasn’t enough soap for the sink AND shower… *scratches head*

@Ted — “Oh by the way, I live in a 30 story high rise, so I’d have to rappel from the roof on a rope or hire spider man to scale the wall with a squeegee” — Hahahahahaha!!!

I can totally imagine that request. Yep, I can see it. 🙂

Congrats on SuperHost Status; I received that as well. It’s a fun little club. 🙂 And I, too, had that one guest who was so bad that she made me consider closing everything down, until I came to my senses and realized that she’s only one solitary bad experience within a sea of otherwise good/great guests.

Love these posts. I’ve learned a lot about Airbnb from the other side. Sounds like I’d qualify as SuperGuest–i’d never dream of asking for extras, am super respectful of being in someone else’s property, use the washer and dryer very rarely, and spend a few minutes cleaning at end of stay so the place looks exactly the way i found it.

Paula – I just recently started reading (like yesterday) and I can’t stop! Won’t stop! You offer such great insight and realistic advice. My husband and I are currently trying to hustle and pay off debt so that we can invest in some property and develop some passive income streams to help fund the life we’d like to have. Your blog is an inspiration!
I couldn’t help but laugh at this post as my current side gig (gotta work hard to make some extra cash right now!) is at David’s Bridal… and people DO ASK FOR DISCOUNTS!!!!! As if I, the lowly part time customer service rep, could change the pricing/policies of a giant corporation. It just goes to show that no matter what industry you’re in (full time or side gig), human nature is to ask for more!

Hi!
I need your advice 🙂
We started renting our apartment recently and our first guest left a three star review for cleanliness. (We asked he said there was some dust around TV? )
Anyway we were afraid this will cause snowball effect ,meaning every other guest who will doubt which rating to give us they will give the lower since the first reference was pretty bad.
We were right, we get great reviews but the cleanliness is still rated badly.
Do you have any idea how to improve this, we clean it thoroughly all the time but it does not seem enough 🙁
As you said it gets pretty emotional with bad reviews

Does the Airbnb $25 credit take $25 away from what the host makes? I’m assuming/hoping Airbnb take that hit? I had one from someone else’s referral (Sorry Paula!) and after it got taken off the price I paid for my first ever airbnb rental I was kind of horrified to think that it might affect my host, who has already been so nice to me. This was a fascinating read, from a guest’s perspective. Thanks!

Spot on!! Loved this! Tonight I googled something like “how to report someone on airbnb” exactly because of #7 and #8 and your article came up. I’ve been a host (I’m actually a “super host” thank you very much) on airbnb for 5 years now. I’ve had hundreds of great experiences and five star reviews, but it just takes one guy to make you mentally exhausted and want to throw in the towel. This reminded me not to take it personally and to move on. Thank you so much for taking the time to write something that is so perfect! If anyone is considering airbnb out there, this guy has it all right. A perfect portrait of the experience of a short term rental!

Hi,
I really enjoyed your post and the detail you go into about all the specific aspects of managing. It really is a very different process than long term renting. We are a small Airbnb property management company out of South Florida, and we would love to share your post on our blog! (And credit you of course.)

LOVE this series…been debating on offering our cabin as an airbnb. Right now, I offer it on my blog to friends and family for $50/night and they have to clean up and change the linens before they leave (I have extra sets there). We still head up (1hr away) and check on it every week and a half or so in between guests to grab dirty linens, and replenish consumables. Right now, I just want low maintenance–you get what you pay for right? But I’d really like to make more than breakeven at some point (cover the property tax and insurance)–On the bright side, the cabin is paid for, and I like that my vacation home isn’t costing me $200/month in expenses.

Now that you are in Nevada, are you continuing with the AirBnB experiment or have you converted this property to long-term leasing?

I love your site. Thank you for all the details and tips you put into your articles.
It makes real estate seem possible and smart, rather than the nightmare that my friends and family assume real estate renting to be.

I became an Airbnb host this past June and had a decent run for the summer. Not spectacular, but doable. I chose to host for a variety of reasons – a recent divorce (Airbnb hosting helped me get some confidence back), meeting a variety of interesting people (mostly pleasant young couples), filling a void that empty nest left (my kids live far away due to their jobs), using two empty bedrooms, and the extra income allowed me to make some much needed repairs on my property.

Two weeks ago, the city assessor sent me a letter saying he needed to see my two Airbnb rooms. As soon as he saw them, he said he was going to reassess part of my home as a business, which would tax me at a higher rate and make me lose some of the tax exemptions my state offers residents below certain income levels. It quickly became clear that I would no longer benefit from Airbnb rentals to offset these added taxes. I was aware of claiming the income and I read and reread the county and city’s motel tax code (it sounded that as long as I did not perform a service such as housekeeping and meal preparation during the peoples’ stays, then I was exempt).

My question is this: has anyone else run into this? It has deflated my confidence, ended the enjoyment I got out of hosting and I feel singled out (a person told me that the “powers that be” would not have investigated me unless there had been a complaint about me….which could have been my ex, a real BNB that does offer high end services….it could have been anyone! All my Airbnb reviews were glowing and my neighbors were totally tolerant of my endeavor. All visits were respectful towards the neighbors if any contact incurred.)

I have seen other cities “fight” Airbnb. They are very intimidating. Does Airbnb help in these matters? They seem to just tell you that you are one your own regarding local jurisdictions.

You may be able to challenge the assessor. Typically, properties are zoned as either “residential” or “commercial” (and within that zoning, there are sub-specifications). From what you’ve said, it sounds like the assessor wants to tax you as though you have commercial zoning, but converting the zoning on your home requires a formal review process. That said, every municipality has different procedures, so I’d encourage you to meet with a real estate attorney in your area who specializes in these types of issues.

Taking a step back, the bigger question is: Do you want to contact an attorney? Do you want to take that next step? It may not be worth the energy, hassle and expense (which is probably what many municipalities are hoping that homeowners will conclude.)

Another, “softer” option that you can take is to chat with other Airbnb hosts in your area. Most cities/towns have meetups (which you can find within “host groups”, or you could also check meetup.com). If your area doesn’t have a formal meetup, just look up listings near you and message the hosts. Invite them out for coffee — or better yet, invite 5-10 of them out for drinks at the same place and the same time, so you’ll be the creator of your first official meetup. You’ll be able to pick everyone’s brain about the specifics of your locality.

@Nigchess — I pay self-employment taxes regardless, since 100% of my income has come from self-employment since 2008. That’s not just Airbnb income; it also reflects this blog and an online content marketing business that I own and operate.

Airbnb does NOT help when it comes to cities trying to fight Airbnb in general . I had a protest in front of my house of about 100 angry protestors holding signs saying airbnb is bad for the community . I found out the night before that the hotel trade commission in NYC organized it and they managed to somehow convince airbnb to kick me off even though i have 50 gleaming five star reviews

I really appreciated your 4 part Airbnb series and can relate to a lot of your comments. We have a large home in Boulder, Colorado with a completely separate guest room that has it’s own outside entrance and patio. For the past 10 years, it just sat there and was only used a few times each year. When my husband started talking about retiring in five years, I tried to think about ways to increase our income and came up with idea to rent the guest room on Airbnb. We put in a flat panel TV, mini-fridge, microwave and coffee maker and bought a hot tub for the attached patio. We’ve now been renting it out for about five months and I would say it has been a very positive experience for us. Not counting variable costs, this month (October) we will make at least $3,000 on the room and are averaging at least $2,000 a month (like you, I have raised my rates several times). I work from home as an attorney, so I’m here to do the room turnover when a guest leaves. I love it when guests stay more than one night (less turnover and less work for me). I usually don’t mind doing the cleaning as it is a nice physical contrast to my legal work (and my Apple watch gives me lots of calories burned credit for going up and down the stairs with the laundry). We add nice little touches for guests like a bottle of wine and a basket of snacks. I also love getting positive reviews from our guests on Airbnb, but really, really hate getting any kind of complaint! Another nice side benefit is that we are able to do a pro-rated expense of things we purchase for the whole house like Direct TV, heating, A/C, driveway repair, phone service, internet, etc., so the Airbnb income is offset a great deal by these prorated expenses. We have also met some really terrific people. One younger guest wrote me a handwritten thank you note and offered to send us a bottle of wine from her parents’ vineyard! All in all, it has a been a great experience which will provide us with about $20,000 – $30,000 in extra income each year for not a lot of extra work.

That’s excellent, Anne-Marie! I used to live in Boulder (I’m a CU graduate), and I feel an instant kinship with anyone else who lives/has lived there. 🙂

I’m glad to hear your experience with Airbnb is so good! It’s been an excellent way to earn extra money, take on some diverse work that’s not-just-staring-at-a-computer-screen, and meet amazing people from around the country/world. Thanks for commenting and welcome to the Afford Anything community! 🙂

#1: In the interest of the security and privacy of my guests and tenants, I’m not sharing my personal home address on the Internet (which is what I’d functionally be doing if I posted the link to my Airbnb listing). That’s also why I typically only include interior photos.

#2: The Airbnb coupon provides a credit.

I’m happy to share my real-estate-related numbers for the sake of educating my readership about how much money they can realistically expect to earn as a rental property investor and/or as an Airbnb investor. Plenty of those so-called real estate gurus make inflated promises. My hope is that by opening up my books to the world, my readers can see real-life numbers. They can use this information to decide whether or not rental properties are worth their time and energy.

But I don’t see any educational value in saying, “this is what I earn from this blog.” If I wrote about the topic of how-to-blog-for-money, then this would be educational. But I don’t blog about blogging. If you’re curious to learn more about blogging as a source of income, check out ProBlogger, ForProfitBlogging or Smart Passive Income.

#3: “How much toilet paper … would you recommend supplying for a one-week stay for two guests?” Depends on how full of sh*t your guests are. 🙂

In seriousness, though, I’d leave 4 rolls of toilet paper for a one-week stay. One or two rolls of paper towels, or a bunch of washable hand towels.

#4: No books yet, but please subscribe to the email list; you’ll get updated when I release anything.

I rent my room out on airbnb. So i am here on the spot. I had a couple and their sister from england book for 3 nights and on the first night my sons were a bit loud at night and they couldn’t sleep.
Naturally i felt terrible about this. They said they were leaving to go home and sleep.
I assumed they were genuine. However young people will often go without much sleep and they are fine. I wondered why they would not continue their stay with a rebate for the night….or continue their investigation of the lovely area they came to visit and stay elsewhere?
Is it possible that people stay….complain….get money back and effectively travel and stay for free?
I am not saying they have done this but its a possibility. High risk if i am not a decent host.

What a great series on becoming a Airbnb host. I am not a host and probably never will be. However, I am retired, travel full time and live mostly in Airbnb accommodations. Your articles contain valuable insights into the human side of hosting that that make my lifestyle possible. Tips or suggested readings on becoming a better guest would be greatly appreciated. Thanks.

I love reading your series about the AirBnB experiment! I myself have a rental apartment in Rotterdam (the Netherlands). It’s not AirBnB, but I I can totally recognize your stories and difficulties, but also the good parts! And after this part I’m considering to maybe rent it to tourist some times haha, the money sounds good 😉 Keep up the good work, I’m definitely going to check out your book!

I’m an AirBNB host in Melbourne Australia. My story is a little different, in that it wasn’t my AirBNB guests that stole from me, it was a druggy guy that watched my guests put the key back in the key locker and saw the password. He cleaned out my apartment in about 3 hours, all caught on film. The guy was later caught by police, but that’s when I really investigated insurance.

I found that the Insurance companies in Australia don’t have a proper policy to cover you. Instead, you have to find a broker that understands how AirBNB works and has routes into the major insurance companies. They can then broker a specific deal which covers you sufficiently.

After going through this whole process and finding a broker who was very knowledgeable I setup http://AirBNBinsurance.com.au. It puts you in touch with him and he then negotiates the deal for you (only for Australians). At the moment I don’t charge for the service, it’s just a matter of making sure hosts in Australia are covered and AirBNB continues to grow.

Anyway, that’s my story. I hope it has added a bit of value. Any suggestions or advice I can put up on the site to help customers, then please let me know.

For some reason Nick typed non-breaking spaces (unicode 160) instead of spaces (unicode 32), so only the beginning of each line is visable. You can read his post by selecting the text and copying to another app (or view source).

“I’m an AirBNB host in Melbourne Australia. My story is a little different, in that it wasn’t my AirBNB guests that stole from me, it was a druggy guy that watched my guests put the key back in the key locker and saw the password. He cleaned out my apartment in about 3 hours, all caught on film. The guy was later caught by police, but that’s when I really investigated insurance.

I found that the Insurance companies in Australia don’t have a proper policy to cover you. Instead, you have to find a broker that understands how AirBNB works and has routes into the major insurance companies. They can then broker a specific deal which covers you sufficiently.

After going through this whole process and finding a broker who was very knowledgeable I setup http://AirBNBinsurance.com.au. It puts you in touch with him and he then negotiates the deal for you (only for Australians). At the moment I don’t charge for the service, it’s just a matter of making sure hosts in Australia are covered and AirBNB continues to grow.

Anyway, that’s my story. I hope it has added a bit of value. Any suggestions or advice I can put up on the site to help customers, then please let me know. “

Paula – Awesome articles – Loved every one of them! I am in the process of starting a Vacation Rental business in Scottsdale, AZ. I totally can relate to all the things you have to buy to furnish a home away from home! I appreciate your honesty and believe that I have learned a great deal from your articles. I am not afraid of the Hustle and am really looking forward to being a part of someone’s vacation!

My current tenant said she will be giving her 30 day notice soon and her 1 bedroom apartment in a triplex we own I think would be a great Airbnb unit. I read this whole blog series and I think im up for it! I am a stay at home mom of 2 and so I am flexible and don’t often travel ANYWHERE. ha ha, one day when the kids are older. I live about 20 minutes away from our triplex so I think this could really work. I stayed in the basement of a Mennonite family through Home Away and it was awesome! Thanks so much for all this great info!

Hi Sarah –
Nope, you don’t have to live in the house. I recommend that you live nearby (within a reasonable driving distance) so that you can check on the property during turnovers, but there’s no need to live there.

One more item that you have NOT discussed is wear and tear. I have a four apartment complex and have turned two apartments into vacation rentals. My numbers are: traditional rental $18k versus $55k earned as vacation rentals. Plus since I live below a two bedroom rental I get to live in quite solitude about 45% of the time. So my units are not used 365 days a year and my wear and tear on the common area, laundry etc is an added bonus.

Reading your year in review gave me lots of chuckles because i have encountered the exact same experiences after my first year including 1 police calling domestic disturbance incident .. I also netted about $29,000 .. Here online trying to figure out taxes . Lat year i got a 1099 but this year they say we arent getting one . What do you plan to do as far as reporting the income?

@Fenton — I track everything automatically through my bookkeeping software (all income + expenses). Once a month, I log into the software to tag the Airbnb-specific expenses, when applicable. (I also tag whether the expense is an improvement vs. a repair, and tag the expenses by property.) It takes about 30 minutes per month. Then I invite my CPA to view my books. He separates the long-term properties from the short-term (Airbnb) properties, and files taxes accordingly. It’s super-simple.

You should (hopefully!) already be tracking your business expenses (Airbnb + any other rentals) in a separate business account(s), and spending with a separate business credit/debit card. If you’re doing this, it’s easy to link those accounts to your bookkeeping software and automate the tracking. This will also generate automatic profit-and-loss statements and a balance sheet.

Fantastic writing and great tips. I really appreciate this blog, and the quality of your replies. I’m a little bit curious that you said you spent only 30 minutes per month tracking your accounting, this was in the January post. Can you say again what system you use to do this? It sounds excellent.

Thank you so much for being so open and informative! Have you ever had to charge a deposit due to damage?
I have a short term rental condo and when I walked the unit the glass top stove had been severly scratched. It looked as though they used it as a cutting board. I asked the property manager her opinion and she said its my fault because the pots i have are too rough? Have you experienced deposit disputes?
Thank you again for your expertise.

Hi Paula, loved the series. I read all of it and I’d say I’m where you are except like 10 years behind ha I want to disconnect from my job, travel more and been saving up to get started in passive income including reading everything on biggerpockets.

Question:
1) Do you feel like your CONS (cleaning, turnover hardships, unnecessary requests) have to do with your demographic or area? You’re renting in a major area so that would mean that the type of people are extremely varied which would entail a lot more diversity and hence, a lot more different preferences and requests I’m guessing. People asking for a rocking chair?
I’m about to start hosting an Airbnb but it is in a remote area near a national park that people come to throughout the year. So I’m hoping I attract the camping type who aren’t going to be asking for luxury items.

2) Do you think charging more/paying a cleaner more money would have worked to reduce your turnover? You got paid $65/hr based on the calculation but if you say paid a cleaner $100 for each job and charged $100 for cleaning to the guests, finding a reliable cleaner may have been easier no? As a person who is looking for a job, if I’m paid $40 but I have to drive and clean a place once in a while, it may appeal to just ditch the job or find someone who is not serious about the work. If you promise $100 per job for every turnover and there will be a lot of turnovers, I can see a lot of people that may be interested in that type of deal due to the reoccurring nature of the business.

3) Assuming cleaning and turnover is able to be automated (say you found a great cleaner for all your turnovers) and the place is rock solid maintenance wise, would it be possible in your experience to be fully remote or remotely operate an airbnb for place in the mountains about 3 hours away?

Paula, I loved this series! I love how they’re number-based . It really helps me to understand what investing is really like but I have one question.

Do you do prior research in terms of expected costs or income? For example, this was an experiment of numbers. Did you have an idea of what would make more money beforehand or you just went in? Because I searched which type of investment makes more money and I saw that Mashvisor (mashvisor.com) does a comparison of exactly this – traditional vs. Airbnb properties. Did you use something like this for research?

OMG – This series is so ON point. As an AirBNB host for the last 9 months, everything here is so true and if you listen and follow it to the T – you will save yourself so much headache/heartache and learn that AirBNB is a great option if you are ready for the service game.

I just became a host on Airbnb this week and we already have a booking! We live in a large home and we are starting our own Airbnb “experiment” by renting one bedroom. Next on the listing will be our entire downstairs floor.
I have a question regarding safety. How do people usually handle the key issue? I was looking into changing our front door entrance to a keyless pad (saw your suggestion), but I don’t know if we should wait for additional bookings.
Would it be safe to handle a copy of your key to the renters? What do other hosts do?

Hey Paula, are you still doing the Airbnb/VRBO gig? I was wondering which city you did/do it in? Atlanta or Las Vegas? I tried to do it in Portland, OR earlier this month (April 2016) and found that the city had made it next to impossible to make a decent profit from it, one of their many new rules is, the host must live in the property he/she rents out 270 days a year!

Love your series which i just came across. We are Atlanta based renters of weekly rentals in Destin and Perdido Key. We have primarily used VRBO/Homeaway for years, but as of late, since they have changed their fee and booking options, we are looking for alternatives including Airbnb. Would welcome your thoughts. Also, your Reason #2 is great. We are always looking for a better way of responding to low ball offers. Thanks for your help.

The only thing is that if you leased your properties you didn’t have to work on renting it out, cleaning etc. You sign the lease and you are, more or less, good to go for 12 months. Just something to think about ..
You are also helping out someone who needs a PLACE TO LIVE. (See issues in Berlin).
I find airbnb is a pure business. Just like the a hotel but the host can give leave bad comments and you have to be extra careful with everything. For me it is a lot of extra stress. I also wish it was cheaper. I did use airbnb in the past and probably will use it in the future too… if I have to.

Just a note on “replace the plastic shower curtain liner”. Nicer hotels use fabric liners, which can be laundered between guests. Worth the extra upfront cost, which is minor, to save the inconvenience of both cleaning and constantly replacing a plastic liner.

Just read all 4 parts, awesome information! I’ve been thinking about opening a vrbo in a “cabin by the lake” scenario, and looking to build several cabins to rent. Do you think this would work out? Or possibly have too much vacancy?
Thanks!

Thanks so much for your information. For some reason I’m overlooking the information on metrics for how much business tapers off during the winter months. I’ve been very successful earlier in the year and into the summer but I’m wondering about opening another unit I’m just concerned about business in the winter. Thanks!

Austin –
Know your local market. Why are people staying at your Airbnb unit? Are they couples/families on vacation? Are they attending conferences or conventions? Attending music festivals? Visiting family? Interning at local companies for a month or two? Searching for jobs? Relocating to the area? Shooting movies? The reasons WHY people need short-term housing will influence WHEN they look for that housing.

Hey Paula,
Terrific site . Thinking of hosting. Is there a guide on how to set up your own home (not a 2nd home) as an Airbnb. Do people do that? My husband and I are retired and have a 3 bed/3 bath home , and we’d like to rent out a room or the whole house. But I would imagine, we’d have to practically move out all personal effects to do this. Any thoughts?

The hubs and I are “empty nesters” living in a 4-bedroom split floor plan home (the master bed/bath at one end, the other 3 bedrooms and bath at the other end, separated by living, dining, kitchen and laundry). We put a twin bed, nightstand, small dresser, mini-fridge and microwave in each of those three bedrooms, charge less than $20/night, and make our mortgage payment plus every month! We LOVE Airbnb!

Awesome article! My wife and I Airbnb our shared room, we are debating turning our one rental into an Airbnb and when we move out to a duplex, turning our current residence and other half of our duplex to an Airbnb rental as well (3 total Airbnb units). My question is mostly what to expect occupancy wise. There is a few Airbnb hosts around our area, but they don’t have tons of reviews so it’s hard to be confident the market will support it. I live in Dallas metroplex, and our Airbnb spare room is full a lot, but I’m just nervous before we fire away and furnish places for Airbnb.
Any advice or tips would be awesome!

I had a cancer patient stay at my house. He didn’t leave the house, He was there 23 out of 24 hours and I found a bottle of vodka in the trash. I had people smoke marijuana and the ashes fell and put a hole in my bedspread. They denied it and said it was like that. Airbnb refused my claim because I didn’t get them a receipt in 24 hours. They were rude to me in the phone, and I had to be on hold for hours on the phone to try and make a claim. My last guests left the shower dripping for days after they left. I’ll never have strangers in my home again. It was a horrible experience. I was surprised how Airbnb refused to pay $70 for a bedspread when they are making millions. I cancelled all my listings and feel better that I’m Airbnb free.

Wow, what a great read, so informative, read all 4 articles. I just bought a ranch with basement in the Historic Roswell area, not far from your stomping ground, was thinking of finishing the basement and listing with AirBNB. There certainly is lots to consider from taxes, insurance, etc., just now doing my research and due diligence on whether or not this is an avenue I want to pursue. My biggest dilemma is deciding whether my renovation in the basement should have a full kitchen, I hate to put the expense into that when I’m not sure if this is a long term endeavor. I already have a bedroom, full bath and washer/dryer in the basement, is it necessary to have a full kitchen? I was thinking more of a wet bar with sink, microwave, refrigerator.

Thank you for this awesome review & write up. I’m planning to do AirBnb experiment as well because I already have the furnishings for the house & currently finishing my housing project. I’m a landlord as well. I used to lease out short term to expats that’s why I have complete furnishings. This is a good option & direction for me. I have an appetite for hospitality &I am a licensed Real Estate Broker. i totally love what you wrote. Thank you.

We’ve used vacation rental sites for years – but not AirBnb – for our vacation home in Florida. Looking to buy 2-3 more for passive income, and considering testing with AirBnb as well. I’ve done well managing the one we have – from 500 miles away. I don’t see why one couldn’t do the same – anywhere? Our goal is to live offshore….on a boat. 😉

Hi – this is a really well thought out and useful website – such accurate observation with constructive advice. I am in London and have done well out of airbnb but I only have has 3 painful guests in 3 years and they could seriously be s doppelganger of each other – old American men with desperate need for a nanny. Am I missing something here? I’m fully with you on the whole service approach/Sheraton tests but these guys are messaging everyday, can’t work anything, not even with manuals and wives in tow so long explanations, then further problems with all electrical equipment. Running out of hot water, err the tank will empty if you stand in the shower for 30 mins! Despite responding straight away, always alternatives such as second electric shower, second TV in other words, they never go without they are just so unhappy that there isn’t some gimp to run around after them. I just don’t get it, all other Americans, nationalities, ages etc are fine except older men with beards! Is it cultural, something I’m missing in translation, please some advice as I have one at the moment (my 3rd) and I have another 3 weeks to go….

You are just a great writer and a generous person! I’ve been an AirBnB host for about four years with two distinct Charleston rentals. My best advice to new hosts is to turn down a lot of people. Like the writer above, cultural and age stereotypes can be sadly true, and it is not worth the headache or the bad review from a crank or young, entitled person looking for a parent to order around. Due to a broken US economy thanks to greedy corporations that have taken over our government, I worry about market saturation and do not think anyone should take on more debt or put themselves in a position to depend solely on this income. I do like the social aspect, and it helps me greatly to pay for my own travel and appurtenant home improvements.

Great writing and I love your humor! I also live in Atlanta and have been an Airbnb host. I have never charged a deposit however. Any thoughts on how to come up with an amount? I am now only renting on a 1 month minimum as it is in my house (separate unit). Thanks!

Yes I’m the same my gets have a one month minimum in the Atlanta area. They are all business people. Most are 6 weeks to 3 months. I have never charged a deposit. I have considered it but wonder if it would loose me bookings.

I’ve been hosting on Airbnb since this summer in an area that has recently become a very popular travel destination (Asheville, NC). I have had absolutely nothing but good experiences, but I’m somwhere between being a novice and having some experience with hosting. I absolutely love your negotiation strategies (and the perspective of responding in a way that meets their needs not yours). I think that replying in that fashion is both pragmatic and respectful. Ultimately, the whole Airbnb experience is based on mutual trust and respect, which is where the experience differs from just renting a hotel room. You have provided some great ideas here (and you are a very skilled writer, too). Thanks!

Thank you for providing such thorough information for those thinking of taking this on.

Just wondering if he had any tips about furnishing the property cheaply? And from your guest feedback, are there any areas you would recommend spending more money on versus scrimping on? For example, luxury sheets etc

Thanks for the info, I am considering doing this in a college town for football games etc. and this was very helpful/insightful.

One thing however, I believe you should be charging the taxes to the customers. Think about it, when you go to a store and buy anything, you are paying the sales tax on whatever it is, not the person selling it. They are simply the middle men. Here in Texas we pay Occupancy taxes instead of Sales tax which come out to 15.75% (6% – State of TX, 2.75% – County, 7% – City). This is the same tax the local hotels charge their customers. I think you essentially robbed yourself of $4000 by paying the taxes out of your pocket.

Just something to keep in mind (it may be different than how it is here in TX).

I’ve had so-far good experience hosting short term vacation rentals for the past 5 years , however have become aware of insurance coverage issues raised by websites now offering special policies. My investigation of these products has caused some concern, as they are strictly business, not homeowner, policies and may not meet the same standards. And furthermore, the cost is 50% more than my Cadillac homeowner policy (expensive area and luxury home).
Your cost analysis and reader discussions don’t factor in this critical issue. I wonder if you can comment.

Seriously, love your 4 part series and it’s so helpful and informative when trying to decide if using AIRBNB is worth it. We live in Colorado Springs and I’m front Atlanta and have spent many an evening at the Fabulous Fox! Thanks for posting! So inspiring!

Great post!! I have a duplex, I live in one unit and have the 2nd one rented (with ‘regular’ tenants). However, I expect that they’ll be moving in the near future. I’ve been kicking the Airbnb idea around, so this set of posts was perfect for me! You present it very realistically. You were very thorough, and it was greatly entertaining. Thanks much!

I am considering putting my handicap accessible private entrance bed & bath on Airbnb. My county just passed a reg enabling me to get a short term stay license, and I will of course pay all the state sales tax and local short term stay taxes.
My horror story is an insurance one! I contacted my long-term agent (of a major insurance company not-to-be-named) to ask what they had in the way of bed-and-breakfast type commercial insurance to replace my homeowners policy so I could Airbnb my place. (The Airbnb supplemental liability insurance generally does not “cure” the situation of voiding your homeowners insurer due to engaging in a business on your property. If it’s not your residence, but an investment property, landlord insurance also will not generally cover an Airbnb short term rental business. This is not legal advice; your situation may vary.)
I soon heard from my agent saying that they were going to non-renew my homeowners insurance, pretty much JUST FOR ASKING ABOUT Airbnb. Mind you, I am not yet advertising or short-term renting. He said he thought I meant I was already doing it and, anyway, I had, in his words, “created uncertainty.” I said of course I’m not doing it without proper coverage, that’s why I consulted him!
He then informed me that my personal liability umbrella, and my existing landlord insurance (on another property I am renting out long term) would also not be renewed. The last thing he said was “You can keep your auto insurance. Sorry for the hassle.”
After an irate phone call to the agency, the insurer did ultimately allow me to remedy this by providing a signed statement that I was not using my residence for short term rentals and that I had no plans to do so.
After researching on my own, I found a short term rental insurer and am making other insurance arrangements to replace all my existing policies.
I told my agent that Airbnb is a multi-billion dollar business, and if the insurance company not-to-be-named was under the impression that none of their homeowners insurance clients were engaged in this, they were likely mistaken, and that it might be a good business idea for them to look into providing an insurance product for them.

Um. You’re awesome. Loved reading the spine tingling 4 part saga of your experiment for two basic reasons: A). I’m standing at the precipice of buying a home for investment purposes and am taking a long gander at the VRBO option, and B). The entertainment quality. I super enjoy your spicy meat-ball meets hospitality goddess personality. Blessings on your future endeavors and thanks for putting your experience out there in such a colorful, don’t-kid-yourself, it-could-be-great, informative way.

I am new to using Airbnb. Airbnb does not allow my listing to add taxes at payout. They suggest I add it when the guest checks in and pays in person for the taxes separately. How do you charge the guest for the taxes? VRBO lets me add tax to the quote before payout. I am finding this not very convenient. I don’t think asking the guest to pay separately for taxes is professional. My two listings are for two guest houses.

I’ve been thoroughly enjoying your work, Paula. Thanks for the great insight!

Have you heard of Airbnb arbitrage? It’s basically using someone else’s rental property as an Airbnb. I have no numbers, but I’ve heard that this is becoming increasingly popular. I’d love to hear your take on this practice. What would be your biggest concern? For reference check out the “Travel Like A Boss” podcast, episode #136.

I have just started hosting on air bnb, my first guests are due to arrive in 2 weeks. Our house is a 4 bedroom house and our first booking is only for 2 guests. My question is should I put bedding on all the beds? Should I ask the guests if they have a room preference and just make up that room?

I loved all of this article, but I was especially struck by #3, Reason 3: “Negotiate based on their needs, not your own.” Where did you get this? It’s brilliant. I’ve started striving for a win for both sides rather than trying to “get one over” on the other party just out of a desire for fairness, but this perspective is new to me and inspired. Thanks!

I hope you continue to have great long term tenants, but my parents, my sister, and a good friend have all had property destruction by tenants, and they’ve all given up on renting. I was looking to get into the AirBnB game, but now I’m not so sure about the time element.

This was great and you crack me up!!! I was so informed and so entertained 🤣 Just starting to explore the idea of a STR and this was very, very helpful. Thank you for your time, energy and talent in writing this for us rookies!!!

Great article. I manage my 3 Atlanta listings from Europe. I haven’t seen the house in 4 months but I’ve been at 100% occupancy all summer. I started in January. I hadn’t heard of VRBO until yesterday.